Valuation Information: 7-9 Fanshawe Street, Auckland - Sorted ...
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Valuation Information: 7-9 Fanshawe Street, Auckland About this document CBRE Limited (CBRE) prepared and issued a valuation report in respect of the property at 7-9 Fanshawe Street, Auckland as at 31 July 2021 (Valuation Report). This document comprises: Part A: a letter as at 31 August 2021 issued by CBRE in respect of the Valuation Report; and Part B: a summary of the Valuation Report prepared by CBRE. The information contained in this document has been prepared by CBRE and should be read in conjunction with Fabric Property Limited’s Product Disclosure Statement dated 13 September 2021 (PDS) and other information included on the Offer Register. References to "Stride Office Property Limited" are references to "Fabric Property Limited" (which changed its name from Stride Office Property Limited on 3 September 2021).
Part A: Letter as at 31 August 2021 issued by CBRE in respect of the
Valuation Report
Part B: Summary of the Valuation Report prepared by CBRE
CBRE VALUATION & ADVISORY SERVICES VALUATION REPORT CLEARPOINT HOUSE 7 - 9 FA N S H AW E S T R E E T AU C K L A N D C E N T R A L C L I E N T: STRIDE OFFICE PROPERTY LIMITED VA LUAT I O N DAT E : 3 1 J U LY 2 0 2 1 © CBRE LIMITED | VALUATION REPORT | PAGE 1 of 55
CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
CONTENTS
1 INTRODUCTION .................................8 5.5 Rental Evidence Commentary ....................... 34
1.1 Instructions ................................................... 8 5.6 Car Park Rental Analysis .............................. 35
1.2 Market Value Definition ................................. 8 5.7 Naming & Signage Rights Rental Analysis ..... 35
1.3 Industry Practice ............................................ 8 5.8 Market Rent Assessment ............................... 35
1.4 Fair Value Definition ..................................... 8 5.9 Sales Evidence ............................................. 37
1.5 Financial Reporting Standard ......................... 8 5.10 Key Sales Evidence Commentary .................. 37
1.6 Reliance ....................................................... 9 5.11 Sales Evidence Conclusion ........................... 42
1.7 Information Provided ..................................... 9 6 VALUATION ...................................... 43
1.8 Special Assumptions .................................... 10
6.1 Valuation Approaches .................................. 43
2 LAND ................................................11 6.2 Capitalisation Approach .............................. 43
2.1 Location ..................................................... 11 6.3 Discounted Cashflow Approach .................... 44
2.2 Resource Management ................................ 12 6.4 Valuation Reconciliation ............................... 47
2.3 Site Description ........................................... 14 6.5 Additional Requirements .............................. 47
2.4 Legal Description ........................................ 15 7 DISCLAIMERS .................................... 48
2.5 Ground Lease Summary .............................. 16
8 APPENDICES ..................................... 51
3 IMPROVEMENTS ................................17 Record of Title
3.1 Overview .................................................... 17 Valuation Definitions and Terminology
3.2 Accommodation.......................................... 18 Major Tenant Lease Summaries
3.3 Floor Areas ................................................. 20
3.4 Construction Details .................................... 20
3.5 Interior Finishes........................................... 20
3.6 Services ...................................................... 20
3.7 Capital Expenditure ..................................... 21
4 OCCUPANCY ....................................22
4.1 Tenancy Schedule ....................................... 22
4.2 Lease Commentary ..................................... 22
4.3 Lease Expiry Analysis ................................... 23
4.4 Outgoings .................................................. 24
4.5 Ground Rental ............................................ 24
4.6 Market Ground Rental Assessment ............... 28
4.7 Net Income Summary .................................. 29
5 MARKET.............................................30
5.1 COVID-19 Market Comment ....................... 30
5.2 Office Market Overview – Auckland CBD ..... 31
5.3 Rental Evidence ........................................... 33
5.4 Subject Rental Evidence ............................... 33
© CBRE LIMITED | VALUATION REPORT | PAGE 2 of 55
CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Clearpoint House, 7-9 Fanshawe Street
© CBRE LIMITED | VALUATION REPORT | PAGE 3 of 55
CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
VALUATION SUMMARY
This report has been prepared for inclusion within a Product Disclosure Statement and will be uploaded to the
Companies Office Disclosure Register. Accordingly, in the interests of privacy and confidentiality, we have
abbreviated or redacted the following report sections:
• Rental Evidence (Section 5.3): We have not included full details of the rental evidence considered in order
to protect the privacy requirements of the Lessors and Lessees involved. Notwithstanding, we have
summarised the key comparables and provided market rental ranges.
• Major Tenant Lease Summaries (Appendices): At the request of Stride Office Property Limited, this section
has been redacted to protect the privacy of lessees. Key lease details are summarised in the Tenancy
Schedule on page 22.
Market Value (plus GST if any)
$11,100,000
The above valuation is subject to the Special Assumptions and Disclaimers within this Report.
Key Valuation Metrics
Initial Yield: 9.76% Net Passing Income (incl. GR Recovery): $1,126,710 pa
Rate $psm (Excl. Cars): $1,356 psm Net Passing Income (Fully Leased): $1,282,162 pa
Adopted Cap Rate: 8.375% Net Market Income (Effective): $1,051,499 pa
Adopted Target IRR: 8.875% % Over Rented (On Occupied): 10.65%
Adopted Terminal Yield: 8.375% No. of Tenants: 26
Area (NLA): 4,806.9 sqm WALT (Income): 1.71 years
Car Bays: 86 Vacancy Rate: 6% - 284.8 sqm
Key Valuation Assumptions
CPI: 1.92% (10 Yr Avg) Total Adopted Capex (10 yrs): $3,228,868
Office Mkt Rent Growth: 2.23% (10 Yr Avg) Office New Lease Term: 6 years
Outgoing Growth: 2.27% (10 Yr Avg) Renewal Probability: 50%
Tenancy Profile by Income Property Risk Profile
$3,500,000 Location Quality
$3,000,000
$2,500,000
$2,000,000
Liquidity Asset Quality
$1,500,000
$1,000,000
$500,000
$0
Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 Year 7 Year 8 Year 9 Year 10
Lettability Tenant Covenant
Renewal Rent Secured Rent Gross Market Rent (fully leased)
© CBRE LIMITED | VALUATION REPORT | PAGE 4 of 55
CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Income Breakdown Lease Expiry (by rent)
Clearpoint 100%
Other Limited 90%
28% 18% 80%
70%
60%
50%
Figured 40%
Limited 30%
16% 20%
Red Moki
Limited 10%
9% 0%
Landmark Worldwide IPFX Limited
Limited 16% Vacancy Renewals Initial Expiries
13%
Property Description
Clearpoint House comprises a 7 level office building situated on the corner of Fanshawe Street and Customs
Street West. The building was originally constructed circa 1960’s and significantly refurbished in 2000. It provides
reasonable quality office accommodation, with views north towards the Viaduct Harbour obtained from the upper
levels. A total of 86 car parks are provided within the basement and on the podium.
The site has an area of 2,072 sqm and is occupied by way of a perpetually renewable ground lease with 14
yearly market reviews.
Prepared by CBRE Limited
Bradley Unthank, B.Prop, B.Com, MPINZ Oliver Sardelic, B.Prop, B.Com
Registered Valuer Valuer
Director
Principal Valuer Valuation & Analysis Assistance
Property Inspected: Yes Property Inspected: Yes
Campbell Stewart, SPINZ, ANZIV, MRICS
Registered Valuer
National Director
Co-Signatory in capacity of Director
The Co-Signing Director confirms having reviewed the valuation methodology and calculations, however the opinion of value expressed has
been arrived at by the Principal Valuer alone.
© CBRE LIMITED | VALUATION REPORT | PAGE 5 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
SWOT & RISK ANALYSIS
Strengths Weaknesses
◼ Strong northern CBD location, being within the ◼ Leasehold tenure with 14 yearly ground rent
Viaduct Harbour Precinct and within walking reviews. The most recent review was in July 2016.
distance to Britomart Transport Centre and Ferry
◼ Demand for Lessee’s Interests is relatively limited,
Terminal.
when compared with freehold assets given the
◼ Adjacent to the subject is the NZI Centre which is additional risk associated with ground rental
considered one of the most prominent and high- reviews and the lower long-term net rental growth
quality office buildings within the Auckland CBD. achievable.
◼ Views overlooking Wynyard Quarter and the ◼ Vacancy rate of approximately 6%.
Viaduct Harbour to the north from upper levels.
◼ The property is slightly removed from the more
◼ The office levels generally present in relatively good sought-after office precincts of the Auckland CBD.
condition with the majority having been refurbished
◼ The ground rental is currently $855,736 per
in recent years.
annum, which reflects $178 psm of net lettable
◼ The building has a seismic rating of 80% NBS. area.
◼ Generally good quality tenant covenants. ◼ Ground rent is only recovered from some tenants
with the majority being unrecovered.
◼ The building provides a total of 86 car parks which
reflects 1 bay per 56 sqm of lettable area. ◼ Some levels would benefit from capital expenditure
in the short to medium term.
◼ Good linkages to the Auckland motorway system.
◼ Operating expenses are at a level commensurate
with similar type buildings in the Auckland CBD
(excluding ground rent).
◼ Investment quantum appealing to a range of
purchasers.
Opportunities Threats
◼ Proactively manage current and upcoming lease ◼ Significant leasing competition from surrounding
expiries. developments.
◼ Office vacancy rates have risen markedly as a result
of the economic impacts of COVID-19 combined
with new supply. Net effective market rents have
also been affected, most notably for secondary
properties.
◼ Refer to the Market Risk Comments below.
© CBRE LIMITED | VALUATION REPORT | PAGE 6 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL 31 JULY 2021 Market Risk Comment Commercial property value growth has been strong in many sectors in recent years, even with the disruption caused by COVID-19 through 2020. This growth is largely due to historically low interest rates, alternative investment markets demonstrating more risk and volatility and low vacancy rates in some sectors (particularly industrial). Prime quality strongly leased property transactions continue to show some yields at historical lows. Notwithstanding currently buoyant conditions in many parts of the property market, the ongoing impact of COVID-19 upon the global economy means that values and incomes may change more rapidly and significantly than during standard market conditions. Should economic and property market conditions deteriorate in the future, then the market value of this asset may decline. This inherent risk factor should be considered in any lending or investment decisions. © CBRE LIMITED | VALUATION REPORT | PAGE 7 of 55
CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
1 INTRODUCTION
1.1 INSTRUCTIONS
Instructing Party: Jessica Rod on behalf of Stride Office Property Limited
Purpose of Valuation: Inclusion within a Product Disclosure Statement
Land
Basis of Valuation: Market Value ‘As Is’
Date of Inspection: 11 June 2021
Date of Valuation: 31 July 2021
1.2 MARKET VALUE DEFINITION
Improvements
In accordance with the International Valuation Standards (IVS), the definition of market value is: "The
estimated amount for which an asset or liability should exchange on the valuation date between a willing
buyer and a willing seller in an arm's length transaction, after proper marketing and where the parties had
each acted knowledgeably, prudently and without compulsion."
1.3 INDUSTRY PRACTICE
Occupancy
Subject to the assumptions and qualifications detailed within, this valuation report is issued in accordance
with the ‘Guidance Papers for Valuers & Property Professionals' effective 1 July 2021 and International
Valuation Standards (IVS) effective 31 January 2020. Where these are at variance, the assumptions and
qualifications included within this valuation report will prevail generally, and the International Valuations
Standards will prevail over the ‘Guidance Papers for Valuers & Property Professionals'.
We hereby certify that the Principal Valuer is suitably qualified and authorised to practise as a valuer; does
Market
not have a pecuniary interest, financial or otherwise, that could conflict with the proper valuation of the
property; and accepts instructions to value the property only from the Responsible Entity/Instructing Party.
1.4 FAIR VALUE DEFINITION
We have also had regard to the requirements of the New Zealand Equivalent to International Financial
Reporting Standard 13 (NZ IFRS 13). In particular, we have considered NZ IFRS 13 Fair Value Measurement,
Valuation
which adopts the following definition of Fair Value:
"Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly
transaction between market participants at the measurement date."
Fair Value under NZ IFRS 13 is generally synonymous with the concept of Market Value under IVS 2017.
Under IVS, the date of valuation is the date at which our opinion of value applies, which in this case is 31
Disclaimers
July 2021. This is different to the date of inspection which is 11 June 2021. Our valuation is on the basis
that there are no material physical changes between the Inspection Date and Date of Valuation.
1.5 FINANCIAL REPORTING STANDARD
The valuation is undertaken in accordance with the requirements of PINZ Valuation and Property Standards
– NZVTIP 2 Valuations for Use in New Zealand Financial Reports. The property is an investment property
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 8 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
and the valuer in conducting this report has also observed the requirements of New Zealand International
Accounting Standard 40 – Investment Property (NZ IAS 40).
1.6 RELIANCE
Reliance: This valuation is strictly and only for the use of the following Reliant Parties and
Purposes:
Land
◼ Stride Office Property Limited for inclusion within a Product Disclosure Statement
only.
◼ Due diligence committees established for the purpose of the proposed initial public
offer of shares in SOPL and listing of SOPL on the NZX Main Board (the offer).
For clarity, reliance is not extended to investors in Stride Office Property Limited.
Improvements
The Client acknowledges and agrees that all material or documents created by CBRE
in providing the Services are provided for its benefit and the purposes set out in the
Report and may not be relied on by anyone other than the Reliant Parties. We do not
assume any responsibility or accept any liability in circumstances where this valuation
is relied upon by any Reliant Party after the expiration of 90 days from the date of
valuation, or such earlier date if the Reliant Parties become aware of any factors that
have any effect on the valuation.
Occupancy
Confidentiality: Any valuation service is confidential as between CBRE and the Reliant Party as
specifically stated in the valuation advice/report. Neither the whole of the report, nor
any part of it, may be published in any document, statement, circular or otherwise by
any party other than CBRE, nor in any communication with any third parties, without
the prior written approval of CBRE of the form and context in which it is to appear,
which may be conditional on relevant third parties first executing (i) a reliance letter
Market
on terms approved by CBRE where the third party wishes to use and/or rely on the
relevant information; or (ii) a non-reliance letter where the third party wishes to use
the report for information purposes only.
Transmission: Only an original valuation report (hard and/or soft copy) received by the Reliant Parties
directly from CBRE without any third party intervention can be relied upon.
Restricted: No responsibility is accepted or assumed to any third party who may use or rely on Valuation
the whole or any part of the content of this valuation.
Copyright: As between CBRE, the Instructing Party and the Reliant Parties, all intellectual property
rights in this Valuation Report are owned by CBRE. Neither the whole nor any part of
the content of this valuation may be published in any document, statement, circular or
otherwise by any party other than CBRE, nor in any communication with any third
party, without the prior written approval from CBRE, and subject to any conditions
Disclaimers
determined by CBRE, including the form and context in which it is to appear.
1.7 INFORMATION PROVIDED
We have been provided with the following key information which has been relied upon within our report:
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 9 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
◼ Tenancy Schedule and Lease Documentation provided by Stride. Our assessment of value is provided on
the assumption that all leases are executed and that individual lease provisions are in accordance with
the tenancy information provided.
◼ Outgoings budget and allocation schedule for the year ending 31 March 2022 provided by Stride.
◼ Detailed Seismic Assessment Report prepared by Envelope Structural dated 21 May 2021.
◼ Technical Due Diligence Report prepared by Cedar Tree Building Consultants dated 28 May 2021.
Land
◼ Asbestos Management Survey Report prepared by Accurate Consulting Limited dated 13 November 2016.
◼ Carpark Plan provided by Stride, dated June 2021.
Our valuation is undertaken on the basis that provided information is accurate. Should this not be the case,
we reserve the right to amend our valuation.
Improvements
1.8 SPECIAL ASSUMPTIONS
Assumptions are a necessary part of undertaking valuations. CBRE adopts assumptions for the purpose of
providing valuation advice because some matters are not capable of accurate calculation or fall outside the
scope of our expertise, or our instructions. Assumptions adopted by CBRE will be formulated on the basis
that they could reasonably be expected from a professional and experienced valuer. The Reliant Parties
accept that the valuation contains certain specific assumptions, and acknowledges and accepts the risk that
Occupancy
if any of the assumptions adopted in the valuation are incorrect, then this may have an effect on the
valuation. Refer to the Disclaimers, Limitations and Qualifications Section, which is pertinent to this valuation
report.
Particularly critical to our valuation are the following assumptions:
Landmark Rent We have been advised that following the COVID-19 outbreak, a rental deferral
Deferral: arrangement has been agreed with Landmark Worldwide Limited. A total of $78,166
Market
is to be repaid in equal monthly instalments over 12 months from 1 January 2021.
Our valuation incorporates these additional rental repayments and is prepared on the
basis that Landmark Worldwide is meeting its full rentals obligations.
Valuation
Disclaimers
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 10 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
2 LAND
2.1 LOCATION
Location Map:
Land
Improvements
Occupancy
View the subject property in Google Maps.
Nearest Main The subject property is located towards the western periphery of the core CBD,
Centre: approximately 600 metres west of Queen Street.
Situation: The property is situated on a corner site on the northern side of Fanshawe Street, at
its intersection with Customs Street West. The property benefits from a high degree of
Market
exposure to traffic travelling along Fanshawe Street. Over the past decade, there has
been a shift in tenant preferred office location in a northerly direction towards the
harbour and its associated views and amenity, with the Viaduct Harbour precinct
considered a strong office location.
Surrounds: The area known as the Viaduct Harbour Precinct was reclaimed from the sea in the
Valuation
early 20th Century and historically has been associated with the maritime, primary
produce and fish processing industries. The general Viaduct Harbour area extends
from Fanshawe Street in the south bordered by Halsey Street in the west through to
Lower Hobson Street and the harbour to the north. The purchase of the area by
Viaduct Harbour Holdings in 1996 and subsequent leaseholding acted as a catalyst
for the redevelopment of the precinct and over the past decade it has emerged as
one of Auckland’s premier office and residential locations.
Disclaimers
To the immediate east of the subject is the NZI Centre at 1 Fanshawe Street. This is
an award winning, 6 level campus-style office building, featuring a ‘market leading’
5.5 star NABERSNZ rating.
Situated to the west of the subject site is the Maritime office development and
adjoining VXV Precinct. This area incorporates the head offices of multinationals such
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 11 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
as KPMG and Microsoft and large national businesses including Bayleys, Datacom
and Fonterra.
Residential and retail development tends to be located towards the northern edge of
the precinct, taking advantage of the best water views and this area is now established
as one of the primary entertainment quarters of the CBD.
Transport Links: Motorway access is provided at Fanshawe Street for the northern motorway, with
Land
access to the north western and southern motorways obtained via Hobson Street. The
Britomart Transport Centre and adjacent ferry terminal is situated approximately 800
metres to the east, providing public train, bus and ferry transport servicing the greater
Auckland area.
2.2 RESOURCE MANAGEMENT
Improvements
Local Authority Auckland Council, Auckland Unitary Plan Operative in part (15 November 2016).
and Plan:
Zone: Business – City Centre, Viaduct Harbour Sub-Precinct A.
The City Centre zone is the top of the centres hierarchy and plays a pivotal role in
Auckland’s present and future success. It seeks to ensure the city centre is an
Occupancy
international centre for business and learning, innovation, entertainment, culture
and urban living.
To maintain and enhance the vibrancy of the city centre, the Zone permits a wide
range of activities to establish in most parts of the city centre. The Zone also
manages activities that have the potential to adversely affect the amenity of the city
centre or that have the potential to generate reverse sensitivity effects on identified
marine and port activity areas.
Market
More specifically, the subject is situated in the Viaduct Harbour Sub-Precinct A zone.
Sub-Precinct A provides for a scale of development and a range of uses which
reflect and complement the Viaduct Harbour as a special place of character within
the city centre. Objectives include the provision of an attractive public waterfront,
visitor destination, place for business and an interesting and safe environment; the
Valuation
maintenance and enhancement of the Viaduct Harbour land and adjacent water
space as a special place of character in the city centre; to mitigate the adverse
effects arising from activities and development; and to encourage a mix of activities
including residential, business, tourism and events that create a vibrant
environment.
View full details of the relevant zone planning controls.
Disclaimers
Indicative Under the City Centre zone, permitted uses are relatively wide, including residential,
Permitted Uses: commercial services, entertainment facilities, offices, retail, conference facilities,
community and industry related activities.
Permitted activities specifically provided for within the Viaduct Harbour Precinct
zone include maritime passenger operations, maritime and port activities, marinas,
community facilities and public amenities.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 12 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
Notwithstanding, we note that new buildings and alterations and additions to
buildings are restricted discretionary under both the City Centre and Viaduct
Harbour Precinct zones. In other words, while many activities are permitted,
buildings that comply with the development controls are restricted discretionary
activities.
Key Development The site has a building height limit of 30 metres (with 2 metres for roof) and a
Controls: maximum floor area ratio of 3.5:1.
Land
We also note that the eastern boundary of the site is identified in the planning maps
as an ‘Indicative location for potential through site link’.
Present Use: Complies with area classification.
Site Controls, The site is subject to the following overlays:
Improvements
Overlays &
Natural Heritage: Regionally Significant Volcanic Viewshafts And Height Sensitive
Designations:
Areas Overlay [rcp/dp] - E10, Mount Eden, Viewshafts.
◼ The purpose of this is to protect regionally significant views to the Auckland
maunga. Buildings that intrude into a regionally significant volcanic viewshaft
require restricted discretionary activity consent up to 9 metres in height, beyond
which they are a non-complying activity. According to the planning maps, the
Occupancy
volcanic viewshaft starts at approximately 33.5 metres above the subject site.
The site is subject to the following controls:
Controls: Coastal Inundation Control – 1m sea level rise
◼ This overlay states that additions of up to 25 sqm to existing buildings in areas
subject to coastal storm inundation 1 per cent annual exceedance probability
(AEP) plus 1 metre sea level rise (CSI1) are classified as permitted activities. In
Market
the meantime, all other additions to existing buildings in areas subject to coastal
storm inundation 1 per cent annual exceedance probability (AEP) plus 1 metre
sea level rise (CSI1).
Controls: Macroinvertebrate Community Index – Urban
◼ Manage discharges and maintain water quality, flows, stream channels and other
freshwater values above the Macroinvertebrate Community Index of 68. Valuation
The site is subject to the following designations:
Designations: Airspace Restriction Designations - ID 8302, Satellite earth station
transmission paths, Television New Zealand Ltd.
Development We are not aware of any development approvals currently relating to the site.
Approvals:
Disclaimers
Highest and Best The current use is considered to be the highest and best use of the property.
Use:
Heritage Listing: Our online search of Council records did not identify any heritage issues.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 13 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
2.3 SITE DESCRIPTION
Land
Improvements
Aerial View Indicative Title Boundaries
Land Area: 2,072 sqm (more or less).
Contour: Generally level.
Services: All typical municipal services appear to be connected to the site.
Occupancy
Accessibility: Pedestrian access is via Fanshawe Street with vehicular access via Lucy Lane.
Potential Flooding: A small portion of the property towards the north eastern corner is bisected by an
Overland Flow Path and is within a Flood Plain ( ). This is depicted on the plan
below:
Market
Valuation
Contamination: We have previously requested site contamination information held from the
Environmental Health Unit of the Licensing and Compliance Services Department,
Auckland Council. The Contaminated Site Enquiry team have advised us that their
records indicate the site has been subject to a historical service station.
Disclaimers
Underground storage tanks and contamination were removed, however some
remain on site. As the site has since been constructed, it is acceptable for continued
business use and is considered contaminants managed/remediated conditionally.
If a change in land use were to occur the site would potentially require further
assessment.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 14 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
Of necessity our valuation assumes that there are no contamination issues that
would have a material effect on the market value, use or marketability of the
property which would prevent the property from continuation of its current use.
We are not environmental experts and we do not know the extent of contamination
(if any). Should subsequent investigations reveal the presence of contaminated
material, we reserve the right to revisit our valuation.
Land
2.4 LEGAL DESCRIPTION
2.4.1 LESSEE’S INTEREST
The Lessee’s interest that is the subject of this valuation is legally described as follows:
Improvements
Identifier Lot Plan Area Registered Owner Tenure
(sqm)
794028 Part Lot 1-3 DP 49828 2,072 Stride Property Limited Leasehold
Relevant Interests: We do not consider there to be any registrations which materially impact on market
Occupancy
value or saleability.
Ground Lease: The title has the instrument L 10838650.1 which is the ground lease that creates
the subject lessee’s interest and is summarised in detail in the next section of this
report (Section 2.5).
2.4.2 LESSOR’S INTEREST – NOT THE SUBJECT OF THIS VALUATION
Market
The Lessor’s interest from which the subject interest is derived is legally described as follows.
Identifier Lot Plan Area Registered Owner Tenure
(sqm)
NA7B/1437 Viaduct Harbour Holdings
Lot 1-3 DP 49828 2,512 Freehold
(Part-Cancelled) Limited Valuation
Relevant Interests: Registered Interests listed on the freehold Record of Title (excluding Liens/Caveats)
are summarised as follows:
◼ D494260.1 Gazette Notice (2000 p731) declaring parts of the within land
Disclaimers
(424m² being Sec's 1, 2 & 3 SO 70004) to be acquired for road and shall vest
in the Auckland City Council.
◼ 10838650.1 Lease in Renewal of Lease 5318933.5 Term 14 years from 1 July
2016 (Renewal Clause) CIR 794028 issued.
Title Search: We refer you to the Appendix for copies of the relevant title documentation.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 15 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
2.5 GROUND LEASE SUMMARY
The Ground Lease that creates the subject Lessees’ Interest is outlined below.
Ground Lease Summary
LEASE DETAILS
Lessor: Viaduct Harbour Holdings Limited
Land
Lessee: Stride Property Limited
Land Area: 2,072 sqm
Lease Term: 14 years
Option Periods: 14 years in perpetuity
Commencement Date: 1 July 2016
Improvements
Next Expiry Date: 30 June 2030
Market Review Frequency: 14.00 yearly
Last Market Review: 1 July 2016
Next Market Review: 1 July 2030
Years to Next Market Review: 8.9 years
Ratchet Clause: No ratchet clause.
Occupancy
RENTAL (PASSING) $pa $psm
Contract Ground Rental: $855,736 $413 psm
Rental Yield: 7.00%
Indicated Freehold Land Value: $12,224,800 $5,900 psm
Date Set: 1 July 2016
MARKET RENTAL REVIEWS
Market
Rental Review: Rent reviews are 14 yearly (on renewal) in accordance with the
provisions of the Public Bodies Leases Act. No account shall be taken
of the value of any improvement now or hereafter erected or made on
the said land.
Lessee Insurance: The lessee will at the Lessee’s own cost and expense forthwith insure
and at all times during the said term keep insured against loss or
damage by fire in the full insurable value thereof all buildings, Valuation
structures and fixtures which are now or may at any time hereafter be
erected upon affixed to the demised premises.
Lessee Maintenance: The lessee will through the said term keep and maintain in food order,
condition and repair, all buildings, structures, fixtures, fences and
drains which are now or hereafter may be erected placed or made
upon the said premises (fair wear and tear and damage caused by
Disclaimers
fire and earthquake excepted).
Renewal: On the expiration of the lease, the Lessee shall have the right to obtain
a new lease of the said premises for a further term of 14 years and
on from time to time in perpetuity at a rent to be ascertained each 14
years in accordance with the rental review clause.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 16 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
3 IMPROVEMENTS
3.1 OVERVIEW
Brief Description: Clearpoint House comprises a 7 level office building situated on the corner of
Fanshawe Street and Customs Street West. The building was originally constructed
circa 1960’s and significantly refurbished in 2000. It provides reasonable quality
office accommodation, with views north towards the Viaduct Harbour obtained
Land
from the upper levels. A total of 86 car parks are provided within the basement and
on the podium.
Age: Circa 1960’s although significantly refurbished in 2000.
Condition and Generally good having regard to its age and use.
Improvements
Repair:
Capital We have been provided with a detailed 10 year capital expenditure schedule, which
Expenditure: we have adopted within our valuation (refer Section 3.7).
BWOF: Expiry date 30 October 2021.
Asbestos: We have received an Asbestos Management Survey Report undertaken by Accurate
Consulting Limited dated 13 November 2016. Below is a brief summary of the
Occupancy
types of asbestos containing materials identified on-site:
◼ Asbestos sprayed coating debris to ceiling voids on Level 5, Level 4 and
Ground Level.
◼ Insulation Boards to service void riser.
◼ Insulation Board debris to service void riser.
Market
◼ Insulation Board debris to toilet ceiling voids.
◼ Thermal Insulation to pipework in basement.
◼ Thermal Insulation debris associated with thermal Insulation to pipework.
◼ Vinyl floor tiles containing asbestos throughout all levels.
◼ Fibre Cement soffits and fascia to the roof. Valuation
◼ Fibre Cement pipework stubs to electrical cabling.
◼ Asbestos gaskets to pipework.
◼ Asbestos containing materials presumed to electrical equipment and lift
motors.
◼ Bitumen presumed to high voltage electrical cables.
Disclaimers
Control measures and recommendations advised generally consist of restricting
access to the area, removing the item using appropriately licensed contractor or
asbestos removalist and labelling and monitoring condition of the item.
The presence of asbestos is still very much prevalent on older buildings throughout
Auckland. This generally does not pose a problem as long as the building is well
Appendices
maintained. The subject is listed within the report as being maintained in a “Fair”
© CBRE LIMITED | VALUATION REPORT | PAGE 17 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
condition. We have undertaken our assessment assuming no adverse effect on the
property’s market value or marketability.
Seismic Comment: We have been provided with a Detailed Seismic Assessment Report prepared by
Envelope Structural Limited dated 21 May 2021. This report concludes the subject
property has a seismic rating of 80% NBS which is an A Grade seismic rating.
3.2 ACCOMMODATION
Land
Office There are two ground floor office tenancies accessed directly from Fanshawe Street.
Accommodation:
Access to the upper office levels is provided via the ground level lift lobby, which is
located between the two ground floor tenancies. The lobby presents to a reasonable
standard with ceramic floor tiling and plasterboard lined walls.
Improvements
The office levels are regularly shaped and comprise approximately 600 sqm floor
plates. Several floors are split into 2-3 smaller suites. Level 6 has a single north
facing deck with Levels 2-5 having 4 smaller decks to each corner.
The floors are configured with a central services core which accommodates male
and female amenities, 2 lifts and a fire stairwell which provide access to all levels
including the basement car park.
Occupancy
Base fitout generally presents in a reasonable condition and comprises carpet floor
coverings, plasterboard lined walls and suspended tile ceilings incorporating
recessed fluorescent lighting and ducted air conditioning. Tenancies which have
been recently refurbished incorporate recessed LED troffers. The office levels
typically have a stud height of circa 2.7 metres
Views to the north and west towards the Viaduct Harbour and Wynyard Quarter are
obtained above Level 3. Below Level 3, views are typically impeded by surrounding
Market
development.
Valuation
Disclaimers
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 18 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
Car Parking: There is a total of 24 external car parks provided to the podium level which is
accessed via Fanshawe Street and exiting onto Lucy Lane. There is also a roller door
on Lucy Lane which provides access to a basement car park level. A total of 57 car
parks are provided to the basement level, being a combination of single and
stacked parks. In addition, 5 external car parks are provided along the boundary
with Lucy Lane.
Land
Improvements
Floor Plan: The layout of a typical level (Level 6) is illustrated in the following floor plan:
Occupancy
Market
Valuation
Disclaimers
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 19 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
3.3 FLOOR AREAS
LETTABLE AREA ANALYSIS Tenant Lettable % of
Type Area (sqm) Total
Major Tenants
Clearpoint Limited Office 1,109.8 23.1%
Figured Limited Office 667.4 13.9%
IPFX Limited Office 12.7%
Land
611.2
Landmark Worldwide Limited Office 686.9 14.3%
Red Moki Limited Office 383.0 8.0%
Major Tenants 3,458.3 71.9%
Other Tenants
Other Office Tenants 1,063.8 22.1%
Improvements
Other Tenants 1,063.8 22.1%
Vacancy
Vacant Tenancies 265.5 5.5%
Vacant Sundry 19.3 0.4%
Vacant Tenants 284.8 5.9%
Total 4,806.9 100.0%
Occupancy
Source: Provided tenancy schedule.
3.4 CONSTRUCTION DETAILS
Foundations & Concrete slab to ground level and suspended concrete slab to upper levels.
Floors:
Structure: Reinforced concrete column and beam.
Market
External Walls: Panelised curtain wall with aluminium composite cladding and laminated glazing.
Roof: The majority of the roof is formed from prefinished trapezoidal profiled metal roof
sheets.
3.5 INTERIOR FINISHES
Valuation
Entry Foyer: Tiled floors with a mix of plasterboard lined and feature walls. Ceilings are
plasterboard lined with recessed lighting.
Floors: Typically carpet tile flooring.
Walls: Plasterboard lined walls.
Ceilings: Suspended tile ceilings.
Disclaimers
Amenities: Ceramic tile flooring and walls with plasterboard lined ceilings.
3.6 SERVICES
Air Conditioning: Ducted air conditioning is provided to all office levels.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 20 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
Fire Prevention: Type 4 automatic smoke detection system with type 3 automatic heat detection
system in the basement carpark, manual call points, hose reels and fire
extinguishers.
Security/Access An automated building security system is installed within the building, with
Control: additional security card access to various areas including the basement level car
parks. Closed Circuit Television (CCTV) cameras are installed to various areas of
the building.
Land
Lifts: 2 Kone 750kg/13 person lifts service the building providing access to all levels
including the basement car parks.
Amenities: Male and female amenities are provided to each level.
Improvements
3.7 CAPITAL EXPENDITURE
Capital Major assets require continual expenditure to maintain the aesthetic appeal,
Expenditure structural integrity, and hence their capital value. We have incorporated a specific
Adopted: capital expenditure allowance throughout the term of our cash flow analysis in
recognition of the requirement for an ongoing refurbishment program.
We have been provided with a Technical Due Diligence Report prepared by Cedar
Occupancy
Tree Building Consultants dated 28 May 2021. This report includes a detailed 10
year capital expenditure schedule which has been adopted within our valuation.
In addition to the budgeted capital expenditure items provided, we have allowed:
◼ Capex escalation based on CPI.
◼ A minimum capital expenditure allowance equivalent to 0.50% of gross income
per annum.
Market
◼ An allowance of $200 psm on each office lease expiry as a general lessor make
good allowance, weighted by the adopted probability of renewal in that year.
Our adopted Capital Expenditure is summarised as follows:
Capital Expenditure Summary Years 1 to 3 Years 4 to 6 Years 7 to 11* Total
Client Advised Programmed General Capital Expenditure Valuation
Structure & Fabric $291,258 $231,634 $100,932 $623,825
Mechanical Services $384,532 $247,877 $256,799 $889,208
Electrical Services $77,341 $173,031 $8,420 $258,792
Fire Services $13,154 $3,046 $4,807 $21,007
Vertical Transport Services $30,000 $234,689 $90,575 $355,264
NZ Building Code $7,500 $128,012 - $135,512
Total Client Advised Capital Expenditure $803,785 $1,018,289 $461,533 $2,283,607
Refurbishment (on expiring leases) $260,494 $127,767 $529,333 $917,593
Disclaimers
General Capital Expenditure Allowance - - $27,667 $27,667
Budgeted CAPEX (incl. Refurb Allowance) $803,785 $1,018,289 $461,533 $2,283,607
Total CAPEX (Adopted Overall) $1,064,278 $1,146,056 $1,018,533 $3,228,868
Total CAPEX $psm $221.41 $238.42 $211.89 $671.72
% of Adopted Value 9.59% 10.32% 9.18% 29.09%
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 21 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
4 OCCUPANCY
4.1 TENANCY SCHEDULE
Area Car Base Rent Outgoings Lease Term Start Expiry Review Review
Level/Suite Tenant (sqm) Bays $pa $psm $pa $psm Term (yrs) Date Date Options Date Structure
Office Tenants
Level 6 IPFX Limited 584.2 - 198,625 340 76,282 131 6.0 1-Jun-16 31-May-22 - 31-May-22 Expiry
Level 6 Balcony IPFX Limited 27.0 - 3,105 115 - - 6.0 1-Jun-16 31-May-22 - 31-May-22 Expiry
Level 5 Figured Limited 611.9 - 231,302 378 79,902 131 6.5 1-Aug-18 31-Jan-25 3 1-Aug-23 2 yearly 5%
Level 5 Balcony Figured Limited 55.5 - 5,830 105 - - 6.5 1-Aug-18 31-Jan-25 3 1-Aug-23 2 yearly 5%
Pt Level 4 Red Moki Limited 346.6 - 129,960 375 47,833 138 6.0 1-Jul-19 30-Jun-25 - 1-Jul-22 3 yearly to MKT
Level 4 Balcony Red Moki Limited 36.4 - 4,004 110 - - 6.0 1-Jul-19 30-Jun-25 - 1-Jul-22 3 yearly to MKT
Pt Level 4 Vacant 265.5 - - - - - - - - Vacant
Land
Level 4 Balcony Vacant 19.3 - - - - - - - - Vacant
Level 3 Clearpoint Limited 613.9 - 165,740 270 84,738 138 11.3 1-Aug-10 30-Nov-21 4 30-Nov-21 Expiry
Level 3 Balcony Clearpoint Limited 55.5 - 5,553 100 - - 11.3 1-Aug-10 30-Nov-21 4 30-Nov-21 Expiry
Pt Level 2 Epson Australia Pty Limited 237.8 - 91,420 384 33,033 139 6.0 1-Feb-20 31-Jan-26 3 1-Feb-22 Ann. 2.5%, 3 yrly to MKT
Level 2 Balcony Epson Australia Pty Limited 18.1 - 2,412 133 - - 6.0 1-Feb-20 31-Jan-26 3 1-Feb-22 Ann. 2.5%, 3 yrly to MKT
Pt Level 2 AT & T Global Network Services New Zealand LLC 249.2 - 92,189 370 34,606 139 4.0 1-Feb-20 31-Jan-24 - 1-Feb-22 Fixed increase in 2022
Level 2 Balcony AT & T Global Network Services New Zealand LLC 27.8 - 3,060 110 - - 4.0 1-Feb-20 31-Jan-24 - 1-Feb-22 Fixed increase in 2022
Pt Level 2 Finzsoft Solutions Limited 123.2 - 40,646 330 17,108 139 2.0 1-Jul-20 30-Jun-22 1 30-Jun-22 Expiry
Level 2 Balcony Finzsoft Solutions Limited 9.6 - 985 103 - - 2.0 1-Jul-20 30-Jun-22 1 30-Jun-22 Expiry
Pt Level 1 Covington Group Holdings Limited 194.0 - 40,646 209 26,684 138 1.0 1-Apr-21 31-Mar-22 - 31-Mar-22 Expiry
Pt Level 1 Clearpoint Limited 440.4 - 120,821 274 60,563 138 11.3 1-Aug-10 30-Nov-21 4 30-Nov-21 Expiry
Pt Level 1 Vector Communications Limited 39.7 - 15,000 378 5,463 138 3.0 1-Jan-19 31-Dec-21 3 31-Dec-21 Expiry
Ground, Monthly Clearpoint Limited 164.4 - 25,420 155 20,246 123 0.7 1-Jun-21 31-Jan-22 - 31-Jan-22 Expiry
Ground Landmark Worldwide Limited 686.9 - 207,787 303 84,592 123 13.0 1-Dec-09 30-Nov-22 - 1-Dec-21 Expiry
4,806.9 - 1,384,503 288 571,051 119
Signage Tenants
Naming Clearpoint Limited - - 25,000 - - - 11.3 1-Aug-10 30-Nov-21 4 30-Nov-21 Expiry
Improvements
Signage IPFX Limited - - 12,750 - - - 2.0 1-Jun-20 31-May-22 - 31-May-22 Expiry
- - 37,750 - - -
Telecoms Tenants
Telecoms Vodafone New Zealand Limited - - 14,280 - - - 15.0 1-Sep-10 31-Aug-25 - 1-Sep-21 Ann. Fixed 2%
Telecoms Two Degrees Network Limited - - 15,950 - - - 7.0 30-Jun-16 29-Jun-23 - 30-Jun-22 Ann. CPI+2.5%
Telecoms Spark New Zealand Trading Limited - - 20,062 - - - 3.0 1-Jun-19 31-May-22 3 31-May-22 Expiry
- - 50,292 - - -
Car Parking Tenants
External Car Parks IPFX Limited - 5 23,400 90 - - 6.0 1-Jun-16 31-May-22 - 31-May-22 Expiry
Basement Single Car Parks IPFX Limited - 9 46,800 100 - - 6.0 1-Jun-16 31-May-22 - 31-May-22 Expiry
Basement Stacked Car Parks IPFX Limited - 2 8,320 80 - - 6.0 1-Jun-16 31-May-22 - 31-May-22 Expiry
External Car Parks Figured Limited - 2 8,736 84 - - 6.5 1-Aug-18 31-Jan-25 3 1-Aug-23 2 yearly 5%
Basement Single Car Parks Figured Limited - 6 32,760 105 - - 6.5 1-Aug-18 31-Jan-25 3 1-Aug-23 2 yearly 5%
Basement Single Car Parks Red Moki Limited - 1 5,460 105 - - 6.0 1-Jul-19 30-Jun-25 - 1-Jul-22 3 yearly to MKT
External Car Parks Red Moki Limited - 3 13,780 88 - - 6.0 1-Jul-19 30-Jun-25 - 1-Jul-22 3 yearly to MKT
Basement Stacked Car Parks Red Moki Limited - 2 7,800 75 - - 6.0 1-Jul-19 30-Jun-25 - 1-Jul-22 3 yearly to MKT
Basement Single Car Parks Clearpoint Limited - 3 13,780 88 - - 11.3 1-Aug-10 30-Nov-21 4 30-Nov-21 Expiry
External Car Parks, Monthly Clearpoint Limited - 1 4,940 95 - - 5.0 1-Feb-17 31-Jan-22 4 31-Jan-22 Expiry
External Car Parks Epson Australia Pty Limited - 2 9,442 91 - - 6.0 1-Feb-20 31-Jan-26 3 1-Feb-22 Ann. 2.5%, 3 yrly to MKT
Basement Single Car Parks Epson Australia Pty Limited - 3 14,163 91 - - 6.0 1-Feb-20 31-Jan-26 - 1-Feb-22 Ann. 2.5%, 3 yrly to MKT
Basement Stacked Car Parks Epson Australia Pty Limited - 2 9,442 91 - - 6.0 1-Feb-20 31-Jan-26 - 1-Feb-22 Ann. 2.5%, 3 yrly to MKT
Occupancy
External Car Parks Covington Group Holdings Limited - 2 9,360 90 - - 1.0 1-Apr-21 31-Mar-22 - 31-Mar-22 Expiry
Basement Stacked Car Parks Covington Group Holdings Limited - 1 5,200 100 - - 1.0 1-Apr-21 31-Mar-22 - 31-Mar-22 Expiry
Basement Single Car Parks Covington Group Holdings Limited - 1 5,200 100 - - 1.0 1-Apr-21 31-Mar-22 - 31-Mar-22 Expiry
External Car Parks Landmark Worldwide Limited - 5 20,800 80 - - 13.0 1-Dec-09 30-Nov-22 - 1-Dec-21 Expiry
Basement Single Car Parks Vector Communications Limited - 1 5,200 100 - - 3.0 1-Jan-19 31-Dec-21 - 31-Dec-21 Expiry
Basement Stacked Car Parks, Monthly Melissa Cooper - 1 2,600 50 - - 13.5 11-Aug-08 31-Jan-22 - 31-Jan-22 Expiry
Basement Stacked Car Parks, Monthly Alan McMurtry - 1 3,120 60 - - 8.9 1-Nov-12 30-Sep-21 - 30-Sep-21 Expiry
External Car Parks, Monthly FrontOffice Solutions Limited - 1 3,120 60 - - 8.9 15-Nov-12 30-Sep-21 - 30-Sep-21 Expiry
Basement Stacked Car Parks, Monthly Jordan Foo - 1 2,600 50 - - 8.1 19-Aug-13 30-Sep-21 - 30-Sep-21 Expiry
Basement Single Car Parks, Monthly Darktrace Limited - 1 2,600 50 - - 3.9 13-Mar-18 31-Jan-22 - 31-Jan-22 Expiry
Basement Stacked Car Parks, Monthly Darktrace Limited - 2 5,200 50 - - 5.2 5-Dec-16 31-Jan-22 - 31-Jan-22 Expiry
External Car Parks, Monthly Kiri Bush - 1 4,680 90 - - 0.8 1-Apr-21 31-Jan-22 - 31-Jan-22 Expiry
External Car Parks, Monthly Parkable - 6 16,957 54 - - 1.0 31-Jul-21 31-Jul-22 - 31-Jul-22 Expiry
Basement Stacked Car Parks, Monthly Clearpoint Limited - 2 5,200 50 - - 0.9 22-Mar-21 31-Jan-22 - 31-Jan-22 Expiry
Basement Single Car Parks, Monthly AT & T Global Network Services New Zealand LLC - 3 14,916 96 - - 1.2 30-Nov-20 31-Jan-22 - 31-Jan-22 Expiry
Basement Single Car Parks Vacant - 9 - - - - - - - Vacant
External Car Parks Vacant - 1 - - - - - - - Vacant
Basement Stacked Car Parks Vacant - 6 - - - - - - - Vacant
- 86 305,575 68 - -
Total 4,806.9 86 1,778,120 370 571,051 119
Market
4.2 LEASE COMMENTARY
Lease Format: The leases are generally in the form of the Bell Gully commercial lease.
Landmark Rent We have been advised that following the COVID-19 outbreak, a rental deferral
Deferral: arrangement has been agreed with Landmark Worldwide Limited. A total of
$78,166 is to be repaid in equal monthly instalments over 12 months from 1 Valuation
January 2021. Our valuation incorporates these additional rental repayments and
is prepared on the basis that Landmark Worldwide is meeting its full rentals
obligations.
Outgoings The leases are structured on a net rental basis, whereby each lessee pays their
Recoveries: proportion of all outgoings, with such proportion calculated by reference to each
tenancy’s lettable area as a percentage of the overall building’s lettable area.
Disclaimers
Ground rent is recoverable from some tenants although increases are generally
capped.
Sundry Income: Clearpoint Limited have primary naming and signage rights and IPFX Limited have
secondary signage rights. The property also generates sundry income from
telecommunication licenses to Vodafone New Zealand Limited, Two Degrees
Network Limited and Spark New Zealand Trading Limited.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 22 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
Review There is a combination of market rent reviews and annual or two yearly fixed
Mechanisms: percentage increases.
Car Parking: The car parking component is currently leased to various building tenants. There
are 20 car parks which are subject to monthly licences.
Income derived from the car parking component is summarised in the Tenancy
Schedule.
Land
4.3 LEASE EXPIRY ANALYSIS
Year No. of Net Lettable Area Gross Passing Rent
2,500
Tenants sqm % $ pa %
2,000
Vacant 1 285 5.9% - -
Year 1 14 2,252 46.8% 1,131,672 48.2%
Improvements
Year 2 3 687 14.3% 346,087 14.7% 1,500
Area (sqm)
Year 3 1 277 5.8% 129,855 5.5%
Year 4 2 1,050 21.9% 567,367 24.2% 1,000
Year 5 2 256 5.3% 174,191 7.4%
Year 6 + - - - - - 500
Total 23 4,807 100.0% 2,349,171 100.0% -
WALT By Area 1.52 years By Income 1.71 years
Occupancy
Comment: The property has a vacancy rate of 5.9% and a short WALT of 1.71 years.
Market
Valuation
Disclaimers
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 23 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
4.4 OUTGOINGS
Item Adopted
$pa $psm
Recoverable Outgoings
Municipal/Council Rates 199,002 43.66
Water and Sewerage Rates 19,416 4.26
Land
Insurance Premiums 38,011 8.34
Air Conditioning/Ventilation 58,056 12.74
Common Area Cleaning 63,718 13.98
Electricity 89,172 19.57
Fire Protection/Public Address 10,828 2.38
Lifts & Escalators 10,640 2.33
Improvements
Pest Control 2,124 0.47
Repairs & Maintenance 49,348 10.83
Security/Access Control 14,944 3.28
Gardening/Landscaping 3,132 0.69
Administration/Management Fee 37,920 8.32
Rubbish Removal 13,800 3.03
Sustainability Compliance 1,320 0.29
Occupancy
Building Act Services 2,583 0.57
Total Statutory Charges 218,418 47.92
Total Operating Expenses 395,596 86.80
Contract Ground Rental 855,736 187.76
Total Outgoings 1,469,750 322.48
Source: Client outgoings schedule
Market
Outgoings The outgoings detailed above are considered to be within typical market
Comment: parameters for a property of this type, excluding ground rent.
Ground Rent: Ground rent is recoverable from some tenants although increases are generally
capped.
We have been advised that recoverable ground rent currently equates to $ pa. The
Valuation
balance of the ground rent is unrecovered.
4.5 GROUND RENTAL
Overview: We have searched the ground lease and lease renewal which creates the subject
interest.
The renewal of Lease (L 10838650.1) confirms agreement of a new 14 year term
Disclaimers
effective 1 July 2016 and the ground rental to apply from commencement. The
rental was agreed at $855,736 pa, being based on a freehold land value of
$5,900 psm at a rental rate 7.0%.
In order to quantify the effect of the future ground rental reviews on the capital
value of the property it is necessary to forecast the likely outcomes of such reviews
over the 10 year period captured by the DCF approach.
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 24 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
Freehold Land In order to formulate our opinion of an appropriate market ground rental, we have
Value: considered sales of comparable freehold sites which have been analysed on both
a rate per square metre basis and a rate per square metre of FAR. Given the paucity
of directly comparable recent transactions we have also considered recent ground
rental settlements in the CBD.
Land Sales We have considered a number of recent CBD and fringe land sales, which range
Evidence: in location, size and value. We note a paucity of recent directly comparable
Land
development sites sales in the Viaduct and Wynyard Quarter area. The most
relevant sales are detailed as follows.
Address Suburb Sale Sale Land AUP Zoning Max Max Overall $psm
Date Price Area (sqm) (OIP Nov 16) FAR Height (m) $psm Max FAR
35-45 The Strand Parnell Apr-21 $16,100,000 1,934 Mixed Use - 16 $8,325 -
121-125 Beaumont St & 184-200 Pakenham St Wynyard Quarter Mar-21 Confidential 9,793 City Centre 5:1 46 c. $9,000 c. $1,700
25-33 The Strand Parnell Mar-21 $6,089,500 950 Mixed Use - 16 $6,410 -
Improvements
105 Vincent Street Auckland Central Oct-20 $3,350,000 536 City Centre 6:1 50 $6,250 $781
29-31 Anzac Avenue Auckland Central Jul-20 $6,900,000 761 City Centre 8:1 50 $9,067 $1,133
141 Hobson Street Auckland Central Feb-20 $10,488,485 1,783 City Centre 6:1 50 $5,882 $980
28-38 Stanley Street Parnell Apr-19 $25,000,000 4,844 Mixed Use 5:1 33 $5,161 $1,147
74-80 Wellesley Street Auckland Central May-18 $10,000,000 998 City Centre 6:1 50 $10,020 $1,670
204 Hobson Street Auckland Central Jan-18 $3,500,000 506 City Centre 6:1 50 $6,917 $1,153
89-93 Cook Street Auckland Central Dec-17 $5,300,000 1,117 City Centre 4:1 30 $4,745 $1,186
136 Fanshawe Street Auckland Central Oct-17 $30,739,000 5,210 City Centre 4:1 30 $5,900 $1,475
103 Wellesley Street West Auckland Central Jul-17 $12,250,000 1,228 City Centre 5:1 40 $9,976 $1,995
Indicative Rates: As shown above, the most comparable land sales reflect overall rates per square
metre of between $4,745 psm up to $10,020 psm. Alternatively, these sales
Occupancy
reflected rates psm of Max FAR (Maximum Gross Floor Area that is permitted to be
developed on the site, expressed as a multiple of the site area) ranging between
$781 psm and $1,995 psm. Given the differing development potential of the
various sales, the rate per square metre of Max FAR is perhaps the most relevant
statistic quoted in the above table as it allows easier comparison between sites with
different development potential.
The majority of evidence sits between $1,150 - $1,700 psm FAR however this is on
Market
the basis of maximum development which is not a given. Further, it may be argued
that the value of FAR diminishes the higher the ratio, that is, the lower levels have
a higher value attributable to them however this would depend on location and
views obtainable, etc.
Evidence We have particularly considered the following sales.
Valuation
Comments:
Disclaimers
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 25 of 55CLEARPOINT HOUSE, 7-9 FANSHAWE STREET, AUCKLAND CENTRAL
31 JULY 2021
Introduction
121-135 Beaumont Street, Wynyard Quarter
Description: 121-135 Beaumont Street and 184-200 Pakenham Street
West comprises a whole city block of prime freehold land within the rapidly
developing Wynyard Quarter precinct.
It recently sold with an integrated development plan (IDP) that varied
slightly from the previous sale. The IDP allows for a total GFA of 52,000
Land
sqm (up from 45,000 sqm), comprising 434 apartments and retail over
multiple buildings with varying heights up to 46 metres.
There are currently several one and two story buildings and on grade
parking, generating a holding income of circa $1.15m.
The sale price equates to circa $9,000 psm or $1,700 psm of consented
Improvements
GFA. The site previously sold in January 2016 for $6,127 psm or $1,326
psm of consented GFA.
We understand that there is a 12-month deferred settlement period.
Comparability: This sale demonstrates that there is robust
demand for premium CBD development sites.
Occupancy
25-33 The Strand, Parnell
Description: An irregular shaped 950 sqm site which narrows to the rear.
The site has good profile to passing traffic on The Strand in Parnell and
secondary frontage to Augustus Terrace. It has a steep contour to the rear.
The zoning is Mixed Use under the Unitary Plan with a maximum building
height of 16 metres.
Market
Improved with a single level warehouse leased to Bridgestone. The rental is
$124,770 pa with the lease due to expire in November 2022. The lease
has a 12 month demolition clause.
The development site sold to Safari Group NZ with plans for a boutique
hotel to occupy the lower floors and the top 5 floors being residential
Valuation
apartments. The price analyses to a rate psm of $6,411 psm.
Comparability: Inferior to the subject in terms of location and
profile. Lower height limit but no FAR control.
Disclaimers
Appendices
© CBRE LIMITED | VALUATION REPORT | PAGE 26 of 55You can also read
